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Long Term Care Insurance – Not Just for the Elderly

Whenever the topic of Long Term Care Insurance (LTC) is brought up, most people’s reaction is to automatically assume the discussion is about caring for the elderly.   While it is true that LTC coverage is a valuable tool to provide the necessary funds for when we are no longer able to care for ourselves, it should not be overlooked for younger people who are in the prime of their earning years but are unable to purchase the amount of disability insurance that they desire.

LTC insurance pays a monthly benefit to an insured who is unable to perform at least two of the six activities of daily living without assistance.  The activities of daily living are bathing, dressing, toileting, transferring (bed to chair or vice-versa), continence and eating.  It also pays a benefit in the case of cognitive impairment.  Anyone who has been in a serious accident, took a bad fall on the ski slopes, or suffered a debilitating illness or condition could probably have received a benefit from a LTC insurance policy if the condition lasted longer than the waiting period of the contract.

LTC contracts are similar to disability income policies in that they pay a regular benefit if an individual is disabled.  While we are working, many of us rely on disability insurance either through an individual policy or an employee benefit program to protect us in the event we cannot earn income if we become disabled.  There are limitations on the qualifications and maximum limits that you may purchase.  A popular strategy is to top up personal disability coverage with Long Term Care coverage. It is also important to note that the amount of LTC coverage one qualifies for is not based on earned income.

LTC coverage is very reasonably priced at younger ages and with 20 pay options available the policy can be fully funded before the age when many people’s thoughts turn to this type of insurance.  LTC coverage is easier to obtain when younger and coverage continues beyond the average lifespan of a Long Term Disability Plan, making it a good protection vehicle for your entire lifetime.

Why should a person between the ages of 30 and 50 consider LTC?

If you are an active person into extreme sports such as skiing snowmobiling and have a serious accident it is possible you will be recuperating for several months needing assistance to do the activities of daily living you may be eligible for claim.

Let’s consider the situation of Jim, who is 42 and a successful businessman.  Jim wishes he could obtain more long term disability coverage than he currently carries, but has reached the maximum available based on his earned income.  He is very cognizant that as an avid skier he is susceptible to a disability.

At Jim’s age he could purchase a LTC policy which would pay him $5,000 of monthly benefit after a waiting period of 30 days should he become disabled with a condition that would limit his performing the activities of daily living as mentioned above.  This benefit could be paid to him for the rest of his life and could also have multiple claims throughout Jim’s life.

By purchasing the policy today, Jim’s premiums would be approximately $200 per month for 20 years.  He would have the peace of mind of this additional income protection during his active and peak earning years and would be able to continue this benefit into his retirement years with no additional premium payments.  If Jim waited until age 62 to purchase LTC to protect him as he aged, the premium would be approximately $460 a month.

Considering that Long Term Care insurance can provide an effective complement to your current disability coverage while you are younger and be fully paid for at a time when it becomes most relevant, it is easy to see that LTC insurance is not just for the elderly.


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